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Is Your ERP System Holding you Back?

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July 8, 2020 | 6 Min Read

9 Red Flags that Indicate You Need Upgraded ERP ASAP

Posted By
Cat Cook
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9 Red Flags that Indicate You Need Upgraded ERP ASAP

The Society of Human Resource Management conducted a study on 400 businesses with around 100 employees each and found that each one lost about $400,000 a year due to communication inefficiencies. This loss can take many shapes:

  • Trouble hiring and keeping good people
  • Lost business opportunities
  • Quality control issues
  • Losing customers
  • Unnecessary expenses
  • Bottlenecks and productivity issues
  • Soured relationships with vendors, suppliers, and other partners
  • Costly errors
  • Malicious activity

Communication is just one of the many ways a cloud-ERP improves business function. While making the switch to a cloud-based system isn't one that can be made overnight, some definite signs indicate a decision should be made sooner rather than later.

1. Significant Customer Complaints

Customer complaints are just part of doing business, but increasing complaints, or excessive negative feedback, suggests a breakdown somewhere in the supply chain or operations. On top of that, without an enterprise-wide, data-gathering tool like an ERP, it may be challenging to understand where the breakdown is taking place. Many costly improvement initiatives have fixed the wrong problem because leadership couldn't see the whole picture.

A cloud-ERP streamlines communication, operations, and data analytics across an entire organization and centralizes that information to enhance productivity, accuracy, and customer experience.

2. Different Departmental Systems Causing Delay and Miscommunication

It's hard to find software that can be all things to all people, so at one time you needed a different system in every department. However, modern cloud-ERP has made the impossible possible. A modern ERP is customizable and adaptable, so one centralized, module-based system like NetSuite can do everything. All employees work out of one system with modules customized to meet each department's needs. When delays, miscommunication, and duplicate work disappear, you reclaim productivity.

3. Duplicate Data Entry

When we think of duplicate entry, we think of a department that needs two or more programs to manage processes, so they have to transfer information manually back and forth. But it can also involve even more time-, money-, and paper-wasting activities like:

  • Writing things down on a clipboard and then entering into a computer
  • Printing out information from one system to enter it into another
  • Phone calls from people in the field who can't access or enter information
  • Printing piles of paper out for workers who are on the road
  • Walking documents from one department to another

A secure cloud-ERP can be accessed from anywhere with an Internet connection and is compatible with the modern mobile technologies that are making how we live and work better. There is no reason for these inefficiencies to exist in any organization today.

4. The Current System Delays Decision-Making

Does making a quick decision require checking with several people and ensuring information is up-to-date? These delays are common in some businesses, but they do not have to be. An ERP centralizes communications and automatically transfers data to departments, forms, and people who depend on that information, so everyone from the front-line supervisor to the CEO can make decisions on the most up-to-date information.

5. Mystery Inventory Numbers

Have you found yourself shocked when shrinkage numbers are revealed during a physical inventory? Worse yet, management may not have the data they need to determine if it is due to theft, quality control issues, or poor quality raw materials from a particular supplier. Inaccurate inventory also causes delays on various production lines and last minute orders, which may cost more. Incorrect or delayed inventory costs a company time and money. It is one more sign that your business needs to invest in a cloud- ERP.

6. Management Struggling to Measure Individual Productivity and Quality

When management doesn't have the numbers to compare employees in the same role using the same metrics, they end up looking at things like overtime, punctuality, and personality. These are also important factors, but productivity and the quality of work are what matters. The lack of software or the presence of an outdated ERP that has trouble capturing this data can lead to lousy firing and advancement decisions as well as lost opportunities for improvement in these areas since employees may get subjective, unhelpful, or misinformed feedback during employee reviews.

7. Business Projections Are More or Less Guesses

Many businesses lack the analytics, business intelligence, and real-time visual reporting to identify the trajectory of the company. If you cannot see where you are going, it's even harder to take the right steps to get there. You cannot make real data-driven decisions made on limited data. A cloud-ERP has cross-departmental analytics built-in, and an ERP presents this information in real-time and in a usable form.

8. Operational Inefficiencies Killing Productivity

Aside from duplicate entry, companies who have been doing things a certain way for some time find they are not doing it most effectively. Because an ERP is centralized, it can track productivity, bottlenecks, delays, and quality issues to identify areas where management can improve systems and optimize the whole operation.

9. The System is No Longer Supported By the Vendor

Software and server vendors continue to support their products sometimes for 15-20 years, but eventually, it's simply not time- or cost-effective to do so for the vendor or the business. There are newer technologies that can do the job so much better, and many of the newer technologies like mobile capabilities, the Internet of Things, and third-party apps are not compatible with older systems, further increasing integration and maintenance costs.

Now Is the Time for Cloud-ERP

It's time to stop and consider what the status quo is costing you. How does it impact morale and future hiring? Are you losing customers? Are you losing money? We encourage you to crunch the numbers.

Yes, setting up a cloud-ERP and training employees across a company does take time and cost money, but what will it save you? If you see the above red flags, ManoByte can help you set up a cloud-based NetSuite ERP and quickly begin noticing the improvements. Contact us today to schedule a time to discuss solutions.

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Topics: Enterprise Resource Planning

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